Amazon Pledges to Reimburse Buyers of Faulty Products

If you purchase a faulty product on Amazon that damages property or injures you, the retailer now pledges reimbursement in many cases.

Amazon says it is broadening its A-to-z Guarantee to protect buyers when a defective product sold through Amazon.com causes property damage or personal injury. The protection extends to all products, even those sold by third-party merchants on the site.

The expansion of the guarantee means Amazon will directly pay customers for valid claims of less than $1,000 at no cost to sellers. Claims in such amounts account for more than 80% of cases related to defective products, the retailer says.

In addition, Amazon says it “may step in to pay claims for higher amounts if the seller is unresponsive or rejects a claim we believe to be valid.”

The new policy goes into effect on Sept. 1. If you are a customer with a claim for property damage or personal injury, contact Amazon’s customer service department, and the retailer will notify the seller and help with the claim. (For more detailed instructions, see Amazon’s A-to-z Claims Process page.)

According to Amazon:

“If a seller does not respond to a claim, Amazon will step in to directly address the immediate customer concern, bear the cost ourselves, and separately pursue the seller. If a seller rejects a claim we believe is valid, Amazon may also step in to address the customer concern; in these cases, sellers will continue to have the opportunity to defend their product against the claim.”

The A-to-z Guarantee has been around for two decades. Amazon originally introduced the program to allow customers to easily return products to Amazon that were sold and fulfilled by third-party sellers.

Sellers have long been required to obtain product liability insurance. To make it easier and more affordable for them to do so, Amazon also has unveiled the Amazon Insurance Accelerator, a network of insurance providers that Amazon says will allow sellers to buy insurance “at competitive rates from trusted providers.”

The Washington Post reports that Amazon’s decision to cover claims under $1,000 is likely a response to lawsuits against Amazon related to faulty products sold on the site. Amazon previously has said it bears no responsibility for such claims, the newspaper reports.

Last month, the federal Consumer Product Safety Commission sued Amazon over the retailer’s alleged refusal to recall potentially hazardous products sold by third parties on Amazon’s website, as we reported in “Government Sues Amazon for Not Recalling Some Products.”

The Washington Post report also notes that Amazon is hedging whether it will cover claims at or above $1,000.

Justin “Gus” Hurwitz, a University of Nebraska College of Law professor and director of the Nebraska Governance and Technology Center, told the Post that a lack of a more definitive pledge makes the company’s announcement that it might cover larger claims “cheap talk.”